I use GIMP to make animated avatars and regular avatars. GIMP is a great program it has a huge amount of effects and options that you can use...you just need to work with it because finding your way around it sometimes can be a little difficult.

I also use a program called video avatar to make longer animated gifs but you have to hack it to get the background advertisement to go away. If I want to make a really fast icon I usually just use paint.net. Why spend a lot of money for something like photoshop when you can get programs just like it for free?